The independent travel auditing company Airocheck has launched an online campaign to coincide with the introduction of two new auditing services for travel buyers. To complement its audit for fare mark-ups, it now also provides audits that focus on discount availability and application of fees. AiroCheck offers these auditing services to travel buyers and procurement managers. Clients have included the Whole of Australian Government, the largest travel program in the Southern hemisphere.
Airocheck’s founder and MD Tony O’Connor says that travel buyers most need greater transparency in the actual cost of the travel. “The mid-office systems used by both retail travel agents and TMCs enable the marking up of various fare types. Retail travel agents have to compete for the business with pricing in every quote, and so there is downward pressure on their fare levels that should keep marking-up in check. But this is not the case for corporate agents, or ‘TMCs’. You must book with your appointed TMC to access your negotiated airline and hotel discounts and the various systems and services the TMC provides. This means that, with the business locked in, there is little disincentive for a TMC to add a hidden margin onto an airfare when it can. But TMCs commit to minimising your travel spend, and so they should not mark-up.”
O’Connor says that travel buyers should be wary of very low TMC fees that don’t seem to even cover operating costs. “If fees add up to under 3% of spend” he says, “something is possibly amiss”.
He thinks that whilst systematic marking up is hopefully not common, where it does exist it can substantially increase travel costs, well beyond the impact of fees and differences in systems and services. “These hidden costs have been under-discussed because they have been so hard to detect.” He says. “With the advent of our software that makes the settlement data-of-truth accessible, travel buyers can now pursue transparency where it really matters, in the cost of the actual travel.” O’Connor believes that low discount availability is the second biggest travel cost issue. “There are incentives at various points in the supply chain that might work against best fares and best rates being offered.”
He says that the negative reaction to Airocheck from some prominent travel industry figures is positive reinforcement that the concerns are justified.